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A fund titan makes the case for mutual funds


Should you buy stocks or mutual funds?

"Investors should buy individual stocks only if they have more information, experience and wisdom than professionals," says Sir John Templeton, founder of the Templeton family of mutual funds. "Otherwise, they'd do better to buy mutual funds to receive professional management and diversification."

But in this volatile market, do both stocks and mutual funds worry you? Here's another idea: "Tax-free bonds offer good returns," says Business Week, Dec. 28. "There's plenty of room for appreciation plus good income and at present many long-term municipals yield as much as Treasuries."

DO IT SOON: For rapid growth of your retirement accounts, make contributions early in 1999. The earlier you contribute, the more time your tax-deferred fund has to grow.

SOUND ADVICE: "The basic retirement rule is to decide on a prudent mix and stick with it. Trying to catch market swings by jumping in and out of 401(k) funds is a loser's game." (Money, January)

WALL STREET WATCH: "We're in for more head-spinning in 1999 when a second wave of Asia troubles sends U.S. manufacturing into recession." (Prudential Comments in this week's Barron's)

"By late 1999, this market could be headed to levels that even optimists dare not discuss." (Bob Goodman, Putnam Investments)

"The Internet IPO mania is bad for the market. It isn't healthy for a stock that's worth $9 a share to trade at $79." (Vincent Slavin, IPO trader)

"With inflation tame, interest rates down and corporate earnings up, the Dow is heading to 10,000 and beyond." (Michael Sivy, financial writer)

"Stocks could confound the experts by gaining 20 percent next year but I think the market will take a breather." (Jeremy Siegel, finance professor, Wharton School)

"The Treasury bond rally, driving yields from 5.4 down to 4.9 percent, makes stocks more attractive than bonds." (Rabbitt Market Strategy)

Pub Date: 12/23/98

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